Sometimes, doing the right thing is more important than profits, a lesson

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• Business Environment
•  
• Case Studies
• CASE STUDY (20 Marks)
• Sometimes, doing the right thing is more
  important than profits, a lesson that Malden
  Mills learned firsthand. When the factory burned
  down in 1995 just two weeks before Christmas,
  production halted and employees assumed they'd be
  out of work until the factory was rebuilt. But
  CEO Aaron Feuerstein extended the employees 90
  days at full pay, as well as 180 days with
  benefits at a cost of 25 million to Malden Mills.

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• After the factory was rebuilt and all of
  the displaced workers were rehired, cooperation
  and productivity reached a new high, with 40
  more business, 95 customer and employee
  retention, and a production increase from 130,000
  to 200,000 yards per week. However, since then,
  Malden Mills has been to bankruptcy court three
  times, with much of the debt tied to the rebuild
  of the factory. Feuerstein made employees happy,
  to be sure, but business students should study
  this case to consider whether bold philanthropic
  actions will pay off in the end.
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• Answer the following question.
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• Q1. Do you agree with the actions taken by CEO?
  Justify your reply.
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• Q2. What may be reasons for reaching the
  production of the factory a new high? Discuss in
  detail.
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